National Arts Club within rights in booting president, court rules

Published 5:06 PM ET Sun, 11 Nov 2012

By Joseph Ax

NEW YORK, Oct 11 (Reuters) - The National Arts Club was within its rights when it expelled its longtime president Aldon James after allegations that he cost the club more than $1.7 million by misusing its funds and assets, a New York appeals court ruled Thursday.

The board of directors for the exclusive club, which overlooks New York's tony Gramercy Park and has counted luminaries from Theodore Roosevelt to Martin Scorsese as members, voted out Aldon James in February, along with his twin brother, John, and another member, Steven Leitner.

James, who ran the club for 25 years, claimed in a lawsuit that the directors were biased because they already were embroiled in litigation against him. A Manhattan state Supreme Court justice struck down the board's action in March and ordered the matter heard before a neutral party.

In a unanimous ruling, however, an intermediary appellate court reversed that decision, saying the lower court had "overstepped its authority by interfering with internal, private, club proceedings."

The longstanding spat between the club and James has expanded to include the state attorney general's office, which filed a lawsuit three weeks ago against James accusing him of costing the club more than $1.7 million through mismanagement.

The suit claimed James had taken possession of several club apartments and filled them with heaps of antiques and clothes, rendering them uninhabitable and depriving the club of rental money. It also asserted that James had used the club's funds to lead a lavish lifestyle, including expensive meals, travel and numerous purchases at flea markets.

James has denied the allegations.

Roland Riopelle, a lawyer for the club, said Thursday's ruling affirms that a private club "should be able to decide who is a member of the club."

A lawyer for James did not immediately return a request for comment Thursday. Two lawsuits he has filed against the club over his termination are pending, though Riopelle said he expects Thursday's ruling will help resolve them in the club's favor.